Has it occurred to consumers Real Estate Sales have reached the perfect storm status?
There is a multitude of contributing factors, and in my opinion a very short window to achieve a great buy.
Home Prices have fallen 32% since the peak in the second quarter in 2006.
Nationally prices are down to the pre 2002 levels, and in many locations they are below the year 2000 levels.
Consumer Confidence is in an up-ward trend.
Financial markets are on the rebound, and the Majority of economists predict an end to the Recession cycle by the end of the year.
Interest rates are at their lowest levels since the end of W.W.II
Borrowing money hasn’t been this cheap in most home buyer’s life time, and banks future profits demand that they not stay at this level for much longer.
Seller’s expectations will follow suite as the end of the recession cycle is signaled.
Prices may not rebound for some time due to current appraised values, but I will predict the willingness of sellers to discount their asking prices will diminish as the year draws to a close.
The bottom of any market cycle is signaled by the upward trend.
No one can say for sure when the bottom has been achieved, but we know for certain in hind sight when an upward trend has taken hold. In other words if you are waiting for the unequivocal sign we have reach bottom it will come after it happens not at the moment it takes hold.
I don’t have a crystal ball, but if you wait until the end of the year to buy you will have waited too long, to buy at the very bottom. It’s alright to buy as the market starts to recover; you gain equity quickly, buying as the market approaches the bottom is fine too you will see a small reversal at first then regain the equity and ride the value up over time. So waiting for the bottom will cost the buyer's their strength to negotiate price, the ability to choose among the best available inventory of suitable homes and passing up the best possible rates.
Mortgage interest rates can and will change every day based on market conditions.
But the home buying process takes one or more months to complete if financing is required. So the banks can and will move faster than the Real estate buyers can or will. The banks are the same as the house in Las Vegas, the game is always slanted in their favor, and they’ll shut you off if you start winning too much.
Your-White Mountain New Hampshire real Estate Expert
steve@alpinelakes.com toll free 800-926-5653 /cell 603-381-7898
MLS search and Realtor web site: www.alpinelakes.com
My outside Blog: www.steveswhitemountainblog.com
Lincoln NH & Local interest site: www.localism.com/nh/lincoln
Now is the time to get into that buying mode. I agree, if to many start 'winning' the banks will change the rules again!
I have been singing the same song for a month it is about to take off again don't wait.
Bill, consumers are at a disadvantage if they wait, or think banks will hold these rates while they keep looking.
Terry, It wouldn't take many sales to set the tone, and change the tides...a few good comps can stop the reversal of values pretty quickly.
The National News just gave buyers the GREEN light- here in my market sales have been on the rise for nearly 5 consecutive months- as prices decline. The market is slowly on its way to a recovery at least here in Florida.
Allison...Timing is everything, buyers who still take the attitude that they will wait for the best deal will be default miss the best deal. I'm glad to hear the Florida market is improving that is a good indicator.
Hi Steve...You're so right--NOW is the time to buy! People think they'll just keep waiting around until the market hits rock bottom, but they won't really know that ahead of time. Better to get off the fence now and take advantage of these awesome interest rates and other incentives ($8K first-time home buyer and also the $1,800 tax credit for the state of Georgia)...time to buy a home!
Have a great day,
Anne Rains
Anne... I have been a Broker for over 25 years I remember in 1991 when places were a steal...in 1994-96
all those people that looked and didn't purchase said to me I could have bought for "X" in 1991. It will happen again I promise you, history does repeat itself.
From your computer to my buyers eyes Steve! I'm printing your blog and putting a copy on my bullentin board if that's okay with you? I got my license in 1994 and see exactly what you are talking about. I'm ready. I have the inventory... come on buyers.
Tammy... You have my blessing...print, post and plaster if you wish. Steve
Steve - All good observations. I add that one should buy whenever they intend to hold/live/enjoy for many years. Real estate is not a stock! Buy when you want it!
Wendy... good point real estate is a limited commodity but shouldn't be purchased if you can't hold it for at least 5 years.